Q.What is a Debenture Redemption Reserve? Explain its purpose.

The debenture trustee is appointed by the company itself — the correct option is (A).

When a company issues debentures to the public, the law requires it to appoint one or more debenture trustees to safeguard the interests of the debenture holders (holding the charged security, ensuring repayment and interest). This appointment is made by the company before it issues the prospectus or offer, and the trustee's consent and details are stated in the offer document.

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A Debenture Trust Deed is the formal agreement between the company and the debenture trustees protecting the interests of debenture holders.

When a company issues debentures to the public, it executes a Debenture Trust Deed — a legal document/agreement between the company and the debenture trustees appointed to safeguard the debenture holders. The deed generally contains:

• the terms and conditions of the debenture issue (amount, rate of interest, repayment/redemption terms),
• particulars of the security/charge created on the company's assets,
• the rights of the debenture holders and the powers and duties of the trustees,
• the events on which the security can be enforced. …

The agreement between a company and its debenture holders is the Debenture Trust Deed — option (A).

Because debenture holders are numerous and scattered, the company appoints debenture trustees to protect their interests. The terms of the loan — rate of interest, security/charge on assets, redemption, rights of holders and duties of trustees — are set out in a formal document executed between the company and …

The agreement between a company and its debenture holders is the Debenture Trust Deed.

Because debenture holders are numerous and cannot each negotiate individually, the company executes a Debenture Trust Deed with a debenture trustee who represents them. The deed records the essential terms of the loan — the amount and terms of issue, rate and dates of interest, the nature and particulars of any security/charge over assets, redemption terms, and the rights and remedies of deb …